Fourth-Quarter and Full Year 2010 Results for IMMEDIATE RELEASE
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Fourth-Quarter and Full Year 2010 Results FOR IMMEDIATE RELEASE Highlights Growth in consolidated net sales and net income of 10.5% and 29.4% for the year, respectively; and of 8.8% and 181.8% for the quarter, respectively Television Broadcasting net sales and operating segment income in line with guidance; solid weekday prime time audience share of 70.5% during 2010 Pay Television Networks net sales increased 15%, adding close to 3 million subscribers during 2010 Record-high net additions of more than 1 million subscribers achieved by Sky during 2010, reaching over 3 million subscribers Cable and Telecom net sales and operating segment income grew 27.8% and 31.5%, respectively; Revenue Generating Units reached 3.3 million Consolidated Results Mexico City, D.F., February 17, 2011—Grupo Televisa, S.A.B. (NYSE:TV; BMV: TLEVISA CPO; “Televisa” or “the Company”), today announced results for fourth quarter and full year 2010. The results have been prepared in accordance with Mexican Financial Reporting Standards (Mexican FRS). The following table sets forth a condensed consolidated statement of income for the year ended December 31, 2010 and 2009, in millions of Mexican pesos, as well as the percentage of net sales that each line represents and the percentage change when comparing 2010 with 2009: 2010 Margin 2009 Margin Change % % % Consolidated net sales 57,856.8 100.0 52,352.5 100.0 10.5 Operating segment income 23,062.9 39.0 20,744.7 38.8 11.2 Consolidated net income 8,515.9 14.7 6,582.7 12.6 29.4 Controlling interest net income 7,683.4 13.3 6,007.1 11.5 27.9 Consolidated net sales increased 10.5% to Ps.57,856.8 million in 2010 compared with Ps.52,352.5 million in 2009. This increase was attributable to revenue growth across all our business segments with the exception of Publishing that underwent a restructuring process. Growth was especially strong in our telecom businesses. Controlling interest net income increased 27.9% to Ps.7,683.4 million in 2010 compared with Ps.6,007.1 million in 2009. The net increase of Ps.1,676.3 million primarily reflected a i) Ps.425.7 million increase in operating income; a ii) Ps.1,197.7 million decrease in other expense, net; and iii) a Ps.503.4 million decrease in equity in losses of affiliates, net. These favorable variances were offset by a i) Ps.55.3 million increase in integral cost of financing; ii) a Ps.138.3 million increase in income taxes; and iii) a Ps.256.9 million increase in non-controlling interest net income. Full-Year Results by Business Segment The following table presents full-year results ended December 31, 2010 and 2009, for each of our business segments. Results for the full-year 2010 and 2009 are presented in millions of Mexican pesos. Net Sales 2010 % 2009 % Inc. % Television Broadcasting 22,750.1 38.5 21,561.6 40.3 5.5 Pay Television Networks 3,146.2 5.3 2,736.6 5.1 15.0 Programming Exports 3,074.8 5.2 2,845.9 5.3 8.0 Publishing 3,229.6 5.5 3,356.1 6.3 (3.8) Sky 11,248.2 19.0 10,005.2 18.7 12.4 Cable and Telecom 11,814.2 20.0 9,241.8 17.3 27.8 Other Businesses 3,812.3 6.5 3,771.4 7.0 1.1 Segment Net Sales 59,075.4 100.0 53,518.6 100.0 10.4 Intersegment Operations 1 (1,218.6) (1,166.1) (4.5) Consolidated Net Sales 57,856.8 52,352.5 10.5 Operating Segment Income (Loss) 2 2010 Margin 2009 Margin Inc. % % % Television Broadcasting 10,714.3 47.1 10,323.9 47.9 3.8 Pay Television Networks 1,622.0 51.6 1,660.4 60.7 (2.3) Programming Exports 1,503.6 48.9 1,437.2 50.5 4.6 Publishing 425.3 13.2 190.7 5.7 123.0 Sky 5,074.5 45.1 4,478.8 44.8 13.3 Cable and Telecom 3,907.2 33.1 2,971.9 32.2 31.5 Other Businesses (184.0) (4.8) (318.2) (8.4) 42.2 Operating Segment Income 23,062.9 39.0 20,744.7 38.8 11.2 Corporate Expenses (901.0) (1.5) (658.2) (1.2) (36.9) Depreciation and Amortization (6,579.3) 11.4 (4,929.6) (9.4) (33.5) Consolidated Operating Income 15,582.6 26.9 15,156.9 29.0 2.8 1 For segment reporting purposes, intersegment operations are included in each of the segment operations. 2 Operating segment income (loss) is defined as segment operating income (loss) before depreciation and amortization, and corporate expenses. Television Fourth-quarter sales increased 2.1% compared with the same period of 2009. Broadcasting Four of the top-five rated shows transmitted in Mexico through broadcast television during the quarter were transmitted and produced by Televisa. Full-year sales increased 5.5% to Ps.22,750.1 million compared with Ps.21,561.6 million in 2009, which is in line with our guidance for the year. Televisa’s content continued to outperform with the final episode of the novela “Soy tu Dueña ” being the highest rated program transmitted in Mexico through broadcast television during the year. Additionally, nine of the top-ten rated shows on over-the-air television in Mexico were transmitted by Televisa. Upfront deposits represented 78.3% of revenues during the year and the remaining were sales in the spot market. This figure compares with 78.9% in 2009. Fourth-quarter operating segment income increased 2.8% compared with the same period of 2009, and the margin was 49.9%. Full-year operating segment income increased 3.8% to Ps.10,714.3 million compared with Ps.10,323.9 million in 2009; the margin was 47.1%. The decrease Grupo Televisa, S.A.B. FOURTH-QUARTER AND FULL YEAR 2010 RESULTS Page 2 in margin of 80 basis points was in line with guidance and is primarily explained by the transmission during the year of programs produced around the Soccer World Cup and the soccer matches, which are less profitable than Televisa’s regular programming. Pay Television Fourth-quarter sales increased 15.7% compared with the same period of 2009, Networks mainly driven by the success of our pay-TV channels and the growth in pay-TV penetration in Mexico. Full-year sales increased 15% to Ps.3,146.2 million compared with Ps.2,736.6 million in 2009. The annual increase was achieved in spite of a negative translation effect of foreign-currency-denominated sales; and was driven by higher revenues from channels sold in Mexico as well as higher advertising sales, which represented in 2010 22.7% of segment revenue. As of December 31, 2010, and through our cable and DTH affiliates worldwide, our Pay Television Networks business reached 26 million subscribers. Subscribers abroad carry an average of 3 Televisa pay-TV channels each, meanwhile subscribers in Mexico carry an average of 11.4 Televisa pay-TV channels each. Some of the most successful channels during the year included “Clásico TV” and the 2-hour delayed version of Channel 2. Additionally, during the year, Televisa successfully added to its portfolio of high-definition channels “ Golden ” and “ American Network ”, and launched the “TL Novela ” channel in Brazil. Fourth-quarter operating segment income increased 27.6% compared with the same period of 2009, and the margin increased to 59.9% mainly due to the absence of amortization costs related to the transmission of the 2010 Soccer World Cup. Full-year operating segment income decreased marginally 2.3% to Ps.1,622 million compared with Ps.1,660.4 million in 2009, and the margin was 51.6%. This decrease reflects an increase in cost of sales and operating expenses, driven mainly by investments made in the production and launch of two new channels. In August 2009 we launched our sports pay-TV channel, Televisa Deportes Network (“TDN”), which carried on an exclusive basis ten of the 64 games of the 2010 Soccer World Cup. Additionally, in February 2010 we launched Foro TV, our 24-hours news pay- TV channel, which as of September 2010 is broadcast on our free-to-air channel 4. Programming Fourth-quarter sales increased 32% compared with the same period of 2009. Exports The royalty from Univision increased 12.6% quarter over quarter. The rest of the growth was driven by higher revenue abroad, specifically in Brazil. Full-year sales increased 8% to Ps.3,074.8 million compared with Ps.2,845.9 million in 2009. The annual increase was attributable to i) an increase in royalties from Univision, from US$143 million in 2009 to US$156.1 million in 2010; and ii) higher programming sales mainly in Europe as well as higher revenue from co- productions abroad. This increase was partially offset by a negative translation effect on foreign-currency-denominated sales amounting to Ps.160.2 million. Fourth-quarter operating segment income increased 43.5% compared with the same period of 2009, and the margin reached a fourth-quarter record-high of 53.8%. Grupo Televisa, S.A.B. FOURTH-QUARTER AND FULL YEAR 2010 RESULTS Page 3 Full-year operating segment income increased 4.6% to Ps.1,503.6 million compared with Ps.1,437.2 million in 2009, and the margin was 48.9%.